Global Corporate Dividends Hit Record $1.66 Trillion in 2023

  • According to a report on Wednesday, corporate dividends globally hit an all-time high of $1.66Tn in 2023, with record payouts by banks making up half of the growth
  • On a worldwide basis, 86.0% of listed companies either increased dividends or maintained them, according to the quarterly Janus Henderson Global Dividend Index report, which also forecast that dividend payouts would hit a new record of $1.72Tn this year.
  • The total value of corporate dividends rose from $1.57Tn in 2022 with underlying growth - which accounts for currency movements, special dividends, timing changes, and index changes - of 5% from 2022, UK asset manager Janus Henderson said.
  • "Corporate cash flow in most sectors remained strong and this provided plenty of firepower for dividends and share buybacks," said Ben Lofthouse, head of global equity income at Janus Henderson. According to LSEG data, earnings growth for the S&P 500 in the fourth quarter of 2023 was expected to come in at 9% year-on-year.
  • High interest rates have boosted bank margins and banks paid out a record $220Bn to shareholders in 2023, an underlying rise of 15% from 2022 and continuing a rebound after bank payouts were frozen during the pandemic.
  • Any positive impact from higher banking dividends was almost entirely offset by cuts from the mining sector, the report found, as lower commodity prices weighed on mining profits. "Beyond these two sectors (banking and mining), whose impact was unusually large, we saw encouraging growth from industries as varied as vehicles, utilities, software, food, and engineering, demonstrating the importance of a diversified portfolio," the report said.
  • Europe (excluding the UK) and Japan were significant contributors to global dividend growth, with Europe accounting for two-fifths of the increase and Japan also playing a major role, albeit hampered by a weak yen.
  • Despite flat dividends in emerging markets and a projected slowdown in bank dividend growth, overall corporate dividends are expected to grow by another 5.0% this year to reach $1.72Tn, with strong support for oil dividends and steady progress in defensive sectors like healthcare and consumer goods.  

(Source: Reuters)